Centrelink rorting prisoners on notice

Aussie criminals have received a cash bonanza from taxpayers, illegally claiming $16.5 million in welfare payments while behind bars.

But the federal government is cracking down and wants its money back.

Data matching identified pensions and disability payments made to almost 21,000 prison inmates since 2013. There were 3500 recipients in the past year alone.

"In most cases we uncover those cases in a couple of weeks (of the prisoner being locked up), but in some cases it can take longer," federal Human Services Minister Alan Tudge told reporters in Melbourne on Friday.

"We are increasing the sophistication of our data matching in order to stay in front of the criminals who go to extraordinary lengths to get around the system."

The government says it now matches Centrelink records with inmates around the nation to more quickly snuff out payments.

In some cases prisoners are rorting the system by using fake names and changing their birthdate, Mr Tudge said, which can take longer to detect.